Archive for the ‘Owning bits—copyright’ Category

A federal appeals court has handed down a worrisome decision in the case of Golan v. Holder et al (decision available on DocStoc here). As part of the Uruguay Round Agreements (“URAA”) on international copyright, the U.S. agreed to extend copyright protection to certain foreign works which had previously been in the public domain in the U.S. Indeed, some of those erstwhile public domain works had been used by U.S. artists and writers to create derivative works. For example, one Richard Kapp, now deceased but whose estate is a plaintiff in the case, used a sound recording based on works by Dmitri Shostakovich to create a work of his own. Having in good faith acted creatively with public domain works, such plaintiffs now find that Congress has cut their legs out from under them, and maintained that Congress infringed their First Amendment rights.

The courts that dealt with the case went back and forth and this judicial stop is probably not its last. The court ruled that the government had sufficient reason to act as it did. Here is the key sentence, from page 12 of the decision.

The government argues on appeal that Section 514 is narrowly tailored to advancing three important governmental interests: (1) attaining indisputable compliance with international treaties and multilateral agreements, (2) obtaining legal protections for American copyright holders’ interests abroad, and (3) remedying past inequities of foreign authors who lost or never obtained copyrights in the United States. We hold that the government has demonstrated a substantial interest in protecting American copyright holders’ interests abroad, and Section 514 is narrowly tailored to advance that interest.

In other words, there are American copyright holders (the Motion Picture Association of America and several other agents of the content industries presented themselves as amici) who stand to benefit, because their works, previously in the public domain abroad, will now be protected. The judge carefully stated that he was offering no opinion on rationales (1) and (3).

Copyright and free speech are always in some tension. There is ample reason to believe that copyright has been the winner in that dynamic for the past 15 years or so. What is interesting here is the deference the U.S. is giving, and the court is supporting, to an international treaty as the basis for copyright expansion. Because the protests over the drafted-in-secret Anti-Counterfeiting Trade Agreement, ACTA, are getting intense. See Public Knowledge’s take and invitation to write to the White House. So the combination of treaty and copyright in the Golan case sounds alarm bells. Stay tuned.

On ACTA, see also the statement on the site of the Program on Information Justice and Intellectual Property.

Ireland is implementing a very aggressive Internet filtering scheme. The nation’s largest ISP, Eircom, will be getting the IP addresses of alleged offenders from Irma, the Irish Recorded Music Association. Once Eircom has identified the owner of the account associated with the IP address, it will initiate an increasingly threatening contacts. As the BBC News explains,

Initially they will be sent a letter and a follow-up phone call from a new unit set up by Eircom to deal with the issue. They may also get a pop-up warning on their screen.

If they are identified a third time they will have their service withdrawn for a week and, if a fourth infringement occurs, will be cut off for a year.

What about the EU’s rejection of three-strikes laws as human rights violations? Nonsense, says the head of Irma, Dick Doyle. They have it backwards.

“The European Parliament has been talking about internet access as a basic human right. It absolutely is not. Intellectual property protection is a right.”

Look forward to other countries following suit, including our own, if the AntiCounterfeiting Trade Agreement is as rumored.

Sherry Turkle gave a talk at Harvard recently, not about any of these issues, in which she spoke movingly of her immigrant mother telling her that the great thing about America is that the government can’t open your mail. In the US, if a music CD arrived in our home via the postal service, the government couldn’t open the envelope to check it, without a warrant based on probable cause. Stay tuned for the rules for the Internet to be exactly the opposite.

Representatives of photographers have filed suit against Google for digitizing their photos without permission, in the course of scanning books to create the Google Books library. For a long time, the photographers (and several other groups, whom I lump together as “the photographers”) have been annoyed that they aren’t getting any of the revenues from the settlement; they told the court that in no uncertain terms. The Authors and Publishers, in the course of working out their proposed settlement with Google, completely ignored them, and they are now following through on their threat to make trouble.

The interesting thing about this suit is that the complaint is not that the photographers are being deprived of revenues. In fact Google blacks out the copyrighted photos in the digitized books.

The photographers are complaining that the very act of scanning the books creates an illegal copy of the photographs, even if it is never displayed to a Google Books user. Kind of logical, or would be in a looking glass world.

Yesterday was the “Fairness Hearing” in the Google Books Settlement case. The New York Times has a good report on it. Judge Chin’s questions suggest he is worried that the settlement goes way beyond what was needed to settle the issues between the parties—which is true, of course. A class action lawsuit over copyright infringement should not be a platform for a world-changing business partnership, with the biggest rewards going to the infringer.

Alas, so far I see nothing to suggest that the privacy issues with the settlement have caught the judge’s attention. I found this paragraph from the ACLU particularly interesting:

Because the settlement does not contain any privacy protections for users, Google’s system will be able to monitor which books users search for, which pages of the books they read and how long they spend on each page. Google could then combine information about readers’ habits and interests with additional information it collects from other Google services, creating a massive “digital dossier” that would be highly tempting and possibly vulnerable to fishing expeditions by law enforcement or civil litigants.

Among the reasons Google will rue the day it decided to roll out Buzz as an opt-out product with your social network harvested from your Gmail address book is that it renders worries like the ACLU’s far more credible. With all that useful data about reader behavior, Google itself will be highly tempted to repurpose it. After all, it has shown itself willing to do that with your address book, which many of us consider confidential information—why not do it with the information about which books, and which pages of which books, you spend your time reading?

That’s how the Department of Justice describes the Amended Settlement Agreement, or ASA–the version that Google and the Authors and Publishers came up with after digesting the various objections to the original proposal, including the DOJ’s objections. You can download the DOJ’s 31-page brief here. It is an exceptionally well-written brief, and I don”t mean just by the standards of legal writing. A few key paragraphs follow:

… [W]idespread lawful electronic distribution and use of copyrighted works, including in-print, out-of-print, and so-called “orphan” works, holds vast promise. Breathing life into millions of works that are now effectively dormant, allowing users to search the text of millions of books at no cost, creating a rights registry, and enhancing the accessibility of such works for the disabled and others are all worthy objectives. …

[T]he ASA suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation. As a consequence, the ASA purports to grant legal rights that are difficult to square with the core principle of the Copyright Act that copyright owners generally control whether and how to exploit their works during the term of copyright. Those rights, in turn, confer significant and possibly anticompetitive advantages on a single entity – Google. Under the ASA as proposed, Google would remain the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats. Google also would have the exclusive ability to exploit unclaimed works (including so-called “orphan works”1) without risk of liability. …

[A]lthough Google’s activities are commercially motivated, its business plan would generate numerous public benefits. The ASA would achieve these benefits, however, in spite of and not in furtherance of the basic premises of the Copyright Act. …

Google’s exclusive access to millions and millions of books may well benefit Google’s existing online search business. Google already holds a relatively dominant market share in that market.18 That dominance may be further entrenched by its exclusive access to content through the ASA. Content that can be discovered by only one search engine offers that search engine at least some protection from competition. This outcome has not been achieved by a technological advance in search or by operation of normal market forces; rather, it is the direct product of scanning millions of books without the copyright holders’ consent and then using Rule 23 to achieve results not otherwise obtainable in the market.

These points are not technicalities. They go to the heart of the case. As I said earlier, I feel that a high-noon moment is coming on, a showdown between Google, those representing themselves as the spokespeople for authors and publishers, the US government, and Judge Chin. Eric Saltzman, counsel to Lewis Hyde in the objections posted here earlier, has expressed to me his surprise that the process could have reached this point–he might have expected that the parties would have not only attempted to address the DOJ objections to the original proposed settlement, but would have sought some confirmation from the DOJ that they had succeeded. As it is, they have made a lot of changes without gaining a lot of DOJ support.

The Justice Department objected strenuously to the draft Google Books settlement on antitrust grounds, and when Google went back behind doors with the Authors and Publishers to revise it, the DOJ’s objections were among those take most seriously in the revision. But the DOJ has just announced that it is still unhappy. The DOJ’s objections are very basic: “The [revised settlement proposal] suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation.” That sounds like a problem that is going to be hard to fix with some clever lawyering alone, and the reports don’t suggest that Google is interested in going back for another try at redrafting. So we may be nearing high noon, where Judge Chin just has to give the thumbs-up or thumbs-down on a matter of monumental importance to the world of books and of ideas. Stay tuned; February 18 is his date for the final hearing.

I haven’t blogged lately about the Google Books settlement. You will recall that Google scanned many books, including copyrighted books; associations representing the authors and publishers objected, and sued Google for copyright infringement; the parties went behind closed doors and worked out a way for all the litigants to make some money through what is, essentially, a joint venture in distributing digital books; the settlement went before a court for its approval; the court asked for objections, and received quite a few, about the potential to create a monopoly, about the treatment of foreign works, about the treatment of “orphan works” whose copyright holders could not be found, and about privacy issues, among other things; the parties went back behind closed doors and addressed the earlier issues in the list but not the privacy issues; the court asked for objections to the revised settlement.

The revised settlement is an improvement, and even the original settlement had many good features. But several scholars are now speaking up about problems with the proposed revised settlement. Larry Lessig has an interesting column in The National Review entitled For the Love of Culture, belittling some concerns about the settlement but bemoaning that the broken state of copyright requires a settlement like this at all, and very much worried about the future or cultural heritage if the settlement goes through. Lewis Hyde has amended his previously filed objection, still puzzled about the treatment of orphan works. His letter speaks for itself so I include it below with his permission. It is followed by a related letter of objection by Eric Saltzman, in his role as attorney to Hyde.

Lewis Hyde • 8 Donnell Street

Cambridge, MA 02138

The Honorable Denny Chin

% Office of J. Michael McMahon, Clerk

U.S. District Court, Southern District of New York

500 Pearl Street

New York, NY 10007

27 January 2010

Dear Judge Chin:

I write to amend the letter of objection that I wrote last August in regard to The Authors Guild, Inc., et al. v. Google Inc. (Case No. 1:05-cv-08136-DC). My August letter is on file with your office as Document 480.

I shall here limit my remarks to provisions of the amended settlement that are changed from the original settlement, specifically to the role of the newly proposed trustee for orphan works.

I object to the fact that, despite the amended settlement’s creation of an Unclaimed Works Fiduciary (UWF), the monopoly powers that Google and the Books Rights Registry will acquire, should the Court approve the orphan works elements of the settlement, still stand. The settling parties have limited the role of the UWF such that he may discharge some duties of the registry in some circumstances, but little else. He cannot act fully on behalf of the rightsholders of unclaimed books; he cannot, for example, license their work to third parties.

To put this another way, it is still the case that an approved settlement will in essence grant the settling parties unique compulsory licenses for the exploitation of orphan works. But why make such licenses unique? If the Court and the settling parties believe that they can authorize compulsory licenses of any sort, why not go the extra step and grant such licenses broadly so that competing providers can enter this market?

To address the problem of monopoly in the market for digital books the UWF should be empowered to act as a true trustee. As such, he should make every effort to locate lost owners, communicate to them their rights under the approved settlement, and pay them their due. Absent their instructions to the contrary, he should deliver the works of lost owners to the public through the efficiencies of a fully competitive market.

As Chief Justice Rehnquist has written in regard to the larger purposes of our copyright laws: “We have often recognized the monopoly privileges that Congress has authorized … are limited in nature and must ultimately serve the public good…” (Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)). In regard to both content owners and the public, then, the fiduciary needs to operate in an open economy of knowledge and, for that, he will need the freedom to license work to other actors.

(Note: I have asked my attorney, Eric Saltzman, to separately address the question of the UWF’s authority to license orphaned works to others; please see the attached addendum to this letter.)

My client, Lewis Hyde, tells the Court in his letter of January 27th that the new proposed settlement cannot be fair to the owners of the copyrights in the orphan works and to the public unless it allows the Unclaimed Works Fiduciary to make licenses to other providers to allow competition with the monopoly plan that Google and the Plaintiffs now propose to the Court.

I would like to offer the Court additional support for Professor Hyde’s objection and suggestion.

If the named plaintiffs or others who “opt in” to the settlement wish to sign on to it with their own copyrights (and if it survives any antitrust process), then that shall be their prerogative. However, the combination in this class action lawsuit of inadequate representation and significant actual conflicts among the so-called class should make the Court skeptical of granting a monopolistic license of theabsentmembers’ copyrights.

If the Court does decide to approve a settlement of the case, it should not approve one where Plaintiff’s counsel have consented to deliver the licenses for the orphan works to just one licensee.

It would be a complete fiction to say that Plaintiffs’ attorneys have adequately represented the orphan works authors and their successors in interest in this case. The original settlement proposal clearly demonstrated counsel’s willingness and ability to compromise or, at least, to ignore the orphan works owners’ interests in favor of the named plaintiffs who engaged them and whose assent they needed to cut the deal.

The problem of plaintiff counsel shaping a settlement attractive to the clients before them at the expense of absent class members is a well-discussed problem in class action jurisprudence. This Court may take notice of an incentive in that direction, the more than fifty million dollars of fees that Google has agreed to pay to Plaintiffs’ counsel if the settlement goes through.

Allow me to point out two methods whereby the proposed settlements seriously shortchanged the orphan works owners to enrich other class members at their expense.

The proposed settlement provides that “Google will make a Cash Payment of at least $60 per Principal Work, $15 per Entire Insert and $5 per Partial Insert for which at least one Rightsholder has registered a valid claim by the opt-out deadline” (Emphasis supplied). According to the settlement, total payments will amount to $45 million.

By definition, no orphan work Rightsholders could meet this registration condition. Thus was the settlement engineered so that the rightsholders of orphan works and their successors-in-interest would not and could not get any share of the up-front payments total.

Evidently, in dividing up the scores of millions of dollars that defendant Google was ultimately willing to pay up-front (i.e., unrelated to yet unproven forthcoming revenues) to settle the lawsuit, counsel felt no obligation to share any of it with the orphan works owners, even if the rightsholder should later appear and wish to register and claim that payment. This very large slice of the pie would go only to the known rightsholders, their de facto clients.

This economic discrimination against the orphan works rightsholders went beyond just up-front payments. It also took unclaimed (after five years) revenues from exploitation of the orphan works and assigned them to the known rightsholders of other books, thus promising still further enrichment of the client sub-class with actual control over the settlement.

That particular feature drew such unpleasant attention to the bias in representation in favor of the known rightsholders (and disfavoring the orphan works rightsholders) that it was written out of the settlement proposal now before the Court. Nevertheless, the Plaintiffs’ counsel who now urge the court to approve this revised settlement agreement are the same counsel who, in the first settlement go-around, assured the Court then (as they do now) that they had adequately represented the entire class, including the orphan works rightsholders.

Commonality and adequacy of representation are two touchstones for class certification. “The adequacy inquiry under Rule 23 (a) (4) serves to uncover conflicts of interest between named parties and the class they seek to represent.” Amchem Prods. v. Windsor, 521 U.S. 591 at 625 (1997).

In Amchem, the Supreme Court upheld the Third Circuit Court’s decertification of the class because it found that “…the settling parties achieved a global compromise with no structural assurance of fair and adequate representation for the diverse groups and individuals affected. The Third Circuit found no assurance here that the named parties operated under a proper understanding of their representational responsibilities. That assessment is on the mark.” Id at 595.

As demonstrated above, much less than promising the “structural assurance of fair and adequate representation for the diverse groups and individuals affected”, the settlements that were and are proposed to this Court suggest that advantaging the named class members at the expense of the unrepresented orphan works rightsholders was a goal successfully achieved during the settlement negotiation.

Accordingly, if the Court will entertain a settlement, it should itself take on the burden of making sure that the orphan works rightsholders interests are well protected. At this point, the best way to do so is to free the orphan works from the monopoly straitjacket that the proposed settlement forces on them.

Let the parties live with the deal they made for the parties who were, in fact, adequately and aggressively represented. For the inadequately represented sub-class, the orphan works rightsholders, the Court should empower the UWF (or similar fiduciary) to license their works into the open market. With this authority going forward, the UWF will, as well, be able to adjust licensing of digital rights in these works to the market conditions in an area that is still very new and sure to develop in ways that are, today, impossible to predict.

Professor Hyde’s objection addresses the two enormous flaws in the proposed settlement: 1. the actual conflicts within the class together with the failure of adequate representation of the orphan works rightsholders, and 2. the anti-competitive effect of the full copyright term license it would grant to Google only. The first undermines both the process by which the settlement was achieved and, correspondingly, the public confidence in the courts. The second hurts both the orphan works rightsholders and the strong public interest in access to the knowledge and creativity these books offer.

Short of a initiating a new attempt at settlement — with new counsel for the orphan works rightsholders — the changes Professor Hyde proposes would achieve a result that would be fair for all the parties and for the public.

Very truly yours,

Eric F. Saltzman, Attorney

Not admitted to practice in the U.S. District Court Southern District of New York

Admitted to practice in The Commonwealth of Massachusetts,

Washington State and U.S. District Court Western District of Washington

That is the way appeals court judge Michael Davis described the $1.92 million fine levied on Jammie Thomas (now Jammie Thomas-Rasset) for illegally downloading 24 songs using Kazaa. This is the case we discuss in Chapter 5—Thomas was one of the only people who tried to fight the charges in court. That’s $80,000 per song.

The judge reduced the fine to $54,000, and apparently is unhappy that he couldn’t reduce it further, saying, “This reduced award is significant and harsh [but is] no longer monstrous and shocking.” This may still ruin Thomas, but suggests that the judiciary itself may scold Congress about the absurdity of the present statutory damages structure for copyright infringement.

While preparing a talk about privacy yesterday, I wanted to cite an example of a commercial service that lures people into surrendering their location information in exchange for social connectivity, restaurant recommendations, and the like. I was planning to make the point (and did, when I gave the talk at the HELIN conference today) that location information has cash value, and there are a variety of business models based on getting people to give it up for free and then cashing in on the data that gets collected.

Nothing wrong with this in principle, as long as people understand what they are giving and what they are getting. They are getting connectivity and exposure and recommendations, and they are giving data about the places they go, perhaps not just to the social network but to the business partners of the for-profit corporation that is running it.

In any case, forgetting the names of these networks, I did a little searching and then settled on foursquare as the example I would use. “Check-in to find your friends, unlock your city,” says the site, and the front page then gives a rolling report of what the site members are doing and saying, for example, “Jim N. in DeKalb, Illiois became the mayor of Caribou Coffee.” You can click on the name of the member (player, really) or the establishment to get more information about either. As the site explains,

People use foursquare to “check-in”, which is a way of telling us your whereabouts. When you check-in someplace, we’ll tell your friends where they can find you and recommend places to go & things to do nearby. People check-in at all kind of places – cafes, bars, restaurants, parks, homes, offices.

You’ll find that as your friends use foursquare to check-in, you’ll start learning more about the places they frequent. Not only is it a great way to meet up with nearby friends, but you’ll also start to learn about their favorite spots and the new places they discover.

Not just your friends, either. Just watch the latest check-ins scroll by on the foursquare home page, and you will get lots of interesting tidbits about lots of people. I was starting to groan about the usual privacy questions—who owns the location data, how long does foursquare hold it, how hard will it be for an unhappy spouse or employer to get hold of it, can the company sell it to business partners—when I moved on to work on the next slide.

The service, which is accessible from smartphones and other mobile devices, enables students and visitors to explore the campus and surrounding neighborhoods while sharing information about their favorite places.

The Gazette goes on to proclaim that we are #1: “Harvard is the first university to use foursquare to help students explore their campus and surrounding places of interest.” (Maybe we should take pride in this, though UNC Charlotte claims to be the first university to use foursquare, for a somewhat different purpose. Years ago, when Harvard fell to #2 in the US News rankings, our humor magazine pointed out that this was a good thing, as it would teach us humility, and we should strive to be #1 in humility as we are in everything else.)

Having spent many an afternoon over the past year in information security meetings, where the University has been developing policies and standards for how information about our students may be accessed, stored, and moved, I immediately started wondering whether Harvard had somehow signed onto a deal to encourage students to surrender their privacy, and if so, who was the commercial beneficiary. The Gazette story doesn’t mention data privacy at all. It simply has a Harvard spokesman echoing foursquare’s utopianism.

We believe that Harvard’s participation will allow our community to engage with friends, professors, and colleagues in new ways. We also hope visitors and neighbors will benefit from the platform as it grows through use.

So visiting high school students and Chinese tourists are apparently also the intended “beneficiaries” of this “service.”

As Hal Roberts of the Berkman Center pointed out when I asked him about this story, foursquare’s privacy policy is pure boilerplate:

We receive and store certain types of information whenever you interact with our Service or services. Foursquare automatically receives and records information on our server logs from your browser including your IP address, cookie information, and the page you requested.

It goes on to explain how they aggregate this data and analyze it, and how they won’t disclose it in a way that would identify you personally. Only problem is, the privacy policy doesn’t mention the really private information foursquare collects—the location information. That simply isn’t covered by any of the boilerplate. So they can do what they want with it, without asking. Moreover (and thanks to doc searls for pointing this out), foursquare explicitly says that they may sell that information, and even if they don’t, the company will pass it on if it gets acquired. And that by signing up, you are acknowledging that you understand all that.

Business Transfers: In some cases, we may choose to buy or sell assets. In these types of transactions, customer information is typically one of the business assets that is transferred. Moreover, if Foursquare, or substantially all of its assets were acquired, or in the unlikely event that Foursquare goes out of business or enters bankruptcy, customer information would be one of the assets that is transferred or acquired by a third party. You acknowledge that such transfers may occur, and that any acquirer of Foursquare may continue to use your Personal Information as set forth in this policy.

It’s a free country. If people think it’s fun for people to know where they are, and they understand what they are doing, by all means they should go for it. I am not a killjoy.

But I am puzzled that Harvard wants to encourage this behavior—that it has somehow analyzed the social benefits and the evident commercial interests and privacy risks involved here, and has come to the conclusion that on balance it would be a good thing if a lot of students signed up.

I hardly dare wonder if Harvard itself might have a pecuniary interest in the success of the partnership. I hope not, and that it has simply seen great benefits to the community—and few risks. I would love to know more.

Added January 14: Perry Hewitt, who is quoted in the article, wanted to be clear that there is no “partnership” (as I called it) between Harvard and foursquare. Harvard is simply a foursquare “presence”—as it would be anyway, whether Harvard formally cooperated or not. By allowing foursquare to create a Harvard badge, Harvard is simply making more convenient something people would be doing anyway. I am grateful to Perry for getting back to me and clarifying these points.

In an editorial published on December 13, the Globe takes the risky position of decrying the penalties of the Digital Millennium Copyright Act as “draconian” and the law itself as lacking “common sense” in the area of music downloading. Risky because, of course, the Globe and the New York Times depend on the law to protect their own content. Of course they do not, as the music industry does, take teenagers to court for making copies of their copyrighted content. But that hasn’t stopped the stream of vicious comments about the Globe’s hypocrisy.

The editorial is in response to the trial of Joel Tenenbaum and Judge Nancy Gertner’s plaint to Congress to do something about the “travesty” of justice (the Globe’s word). The paper wonders aloud whether Professor Charles Nesson, who represented Tanenbaum, helped his cause by the defense he took — claiming that music file sharing was allowed under “fair use.” That’s a stretch that even the most libertarian thinkers haven’t endorsed.

What’s interesting to me about the editorial is the reactions. Of course one never knows who the commenters are; they could all be music industry lackeys, for all we know. Still, we have here a defense of big business against a powerless individual — some people even compared him to Madoff, since in each case their crimes were committed with a few keystrokes. There is some amplification of power that people see in the control of digital information that makes them lose all sense of perspective and proportion. I don’t think the same people would think $675,000 was a reasonable fine if Tenenbaum had stolen a CD from a store.